In this article we will check out the progression of hedge fund sentiment towards 51job, Inc. (NASDAQ:JOBS) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is 51job, Inc. (NASDAQ:JOBS) a buy here? Money managers are betting on the stock. The number of long hedge fund positions rose by 1 in recent months. Our calculations also showed that JOBS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are seen as unimportant, old investment tools of years past. While there are over 8000 funds trading at present, We hone in on the aristocrats of this club, about 850 funds. These investment experts direct the lion's share of the hedge fund industry's total asset base, and by monitoring their finest stock picks, Insider Monkey has determined a few investment strategies that have historically outrun Mr. Market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_249122" align="aligncenter" width="395"] Wall Street Bull[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's go over the fresh hedge fund action encompassing 51job, Inc. (NASDAQ:JOBS).
What does smart money think about 51job, Inc. (NASDAQ:JOBS)?
At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in JOBS over the last 18 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in 51job, Inc. (NASDAQ:JOBS) was held by Sensato Capital Management, which reported holding $4.8 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $4.5 million position. Other investors bullish on the company included Fisher Asset Management, Polar Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Sensato Capital Management allocated the biggest weight to 51job, Inc. (NASDAQ:JOBS), around 3.95% of its 13F portfolio. Keywise Capital Management is also relatively very bullish on the stock, designating 0.22 percent of its 13F equity portfolio to JOBS.
As industrywide interest jumped, specific money managers were leading the bulls' herd. Renaissance Technologies, created the most valuable position in 51job, Inc. (NASDAQ:JOBS). Renaissance Technologies had $4.5 million invested in the company at the end of the quarter.
Let's go over hedge fund activity in other stocks similar to 51job, Inc. (NASDAQ:JOBS). We will take a look at Teck Resources Ltd (NYSE:TECK), Churchill Downs Incorporated (NASDAQ:CHDN), Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC), and Quidel Corporation (NASDAQ:QDEL). This group of stocks' market valuations are closest to JOBS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TECK,24,259343,-6 CHDN,31,444952,-1 TKC,3,40169,-4 QDEL,22,125541,4 Average,20,217501,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $218 million. That figure was $19 million in JOBS's case. Churchill Downs Incorporated (NASDAQ:CHDN) is the most popular stock in this table. On the other hand Turkcell Iletisim Hizmetleri A.S. (NYSE:TKC) is the least popular one with only 3 bullish hedge fund positions. 51job, Inc. (NASDAQ:JOBS) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd and surpassed the market by 15.9 percentage points. Unfortunately JOBS wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); JOBS investors were disappointed as the stock returned 13.4% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.